QuestionsQuestions (IC CIRCULAR NO. 23-2007)
It prohibits insurance companies and MBAs from issuing riders that accumulate (or allow accumulation of) fund deposits or contributions in excess of the total future premiums under the insurance policies after the circular takes effect.
Contingency funds, future funds, benefit enhancement funds, and other similar riders.
The limitation applies to the accumulation of fund deposits or contributions after the circular’s effectivity, i.e., prospectively from its immediate effect date.
No. It allows premium deposit fund riders to continue issuing, but only if they comply with strict limits on the maximum amount held in the fund.
The maximum amount must be limited to the total future premiums due under the insurance policy.
It must not exceed the total premiums payable until its last renewal date.
A policyholder cannot make any additional deposit if the existing balance is already equal to or greater than the sum of all future premiums payable on the policy.
No. Any amounts already refunded may no longer be recovered.
Excess premium shall be refunded to policyholders only after their policies have been paid-up, subject to the rider or agreement’s provisions.
Yes. It states the circular “shall take effect immediately,” meaning the restrictions must be complied with without waiting for a later date.
IC Circular No. 23-2007 amends IC Circular Letter No. 41-2006; the earlier rules remain in force only to the extent not inconsistent with the amendments.
The Insurance Commission shall no longer allow such issuance by insurance companies and MBAs, meaning it is a prohibited product feature/structure once the limitation is exceeded.
It prevents the insurer/MBAs from holding deposits in amounts beyond what is needed to cover future premiums, reducing the risk of excessive retention of policyholder contributions.
It provides the contractual framework; the circular states refunds of excess premium shall be made only after policies have been paid-up, subject to the rider or agreement’s provisions.